Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: Joseph Hoane who wrote (52229)	4/10/1998 12:27:00 PM
From: Tom Trawinski	Read Replies (1) of 58324

>>This reminds me of why I was in Iomega originally. (I am not now, but this post makes me think I should get back in.) There was a very interesting analysis on the Motly Fool last fall which argued the following: If you throw out all Iomega earnings except future zip DISK sales, the stock is still cheap. This post reminded me that even if Zip DRIVES only sell 0.8 Million/quarter, each one creates a demand for Zip disks for the next five years. Still cheap at twice the price, from this perspective. << Well, whoever did this analysis does not know what he/she is talking about. In Iomega's most recent annual report, it specifically states that disk sales (i.e. tie ratios) are DECLINING as a result of OEM drive sales. So what you have is Iomega selling lots of drives but fewer disks as a percentage. The disks are the bread-and-butter of earnings and also the "razor blade" business model. It appears Iomega did not do something right in it's analysis of their model. This is hardly a formula for making a lot of money, or the stock looking cheap. Tom

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